Amazon Deal Validates Qualcomm's Data-Center Strategy

Qualcomm's partnership with Amazon has significant implications for the company's future growth. The deal, which could be worth up to $60 billion over a decade, underscores the importance of Qualcomm's data-center strategy. While the agreement does not guarantee $60 billion in revenue, it validates Qualcomm's efforts to expand beyond its traditional smartphone business.

Qualcomm's core business has been uneven, with revenue falling to $9.95 billion in the June 2026 quarter, down from $10.37 billion a year earlier and nearly 19% below the $12.25 billion reported in December 2025. The company's data-center push aims to reduce its dependence on handset sales.

Amazon gives Qualcomm an opening in AI data centers, but the earnings ramp will decide the stock's performance. Qualcomm expects non-handset businesses to exceed half of QCT revenue in fiscal 2027 and rise toward two-thirds by fiscal 2029. The company needs to prove that its custom silicon and optical products can scale into durable, high-value data-center revenue while its established businesses stabilize.